Canada to study biofuel's environmental impact

Reuters 7 Jan 10;

WINNIPEG, Manitoba (Reuters) - The Canadian government has ordered a study of the environmental impact of making ethanol and biodiesel just as a government regulation mandating fuel blending is set to take effect.

The study, ordered on Wednesday, comes after evidence of harmful environmental effects from ethanol plants and amid growing criticism of biofuel technology, according to a government document from the environment ministry, Environment Canada.

"Experiences in the U.S. and Brazil now suggest that existing biofuels production facilities are responsible for the generation of a range of new air- and water-related problems as well as recent concerns over human health," the document states.

The study will help government scientists understand the environmental implications of making biofuel, it states.

Canada has invested heavily in the biofuel industry as a way to reduce greenhouse gas emissions. It has committed to distributing subsidies for biofuel plants totaling up to C$1.5 billion ($1.45 billion) over nine years.

In September 2010, a federal mandate takes effect requiring 5 percent renewable content in gasoline.

A spokesman for Environment Canada was not available for comment by late Thursday afternoon.

On Wednesday, the Canadian Press quoted department spokeswoman Paula Franchellini as saying: "The commissioning of this study does not presuppose that there are any harmful effects from these facilities, nor does it change the government of Canada's commitment to renewable fuels."

Gordon Quaiattini, president of the Canadian Renewable Fuels Association, was unavailable for comment.

Canadian plants make ethanol from corn and wheat and make biodiesel from animal fat, soybeans and canola. Canadian biofuel production is expected to grow by 76 percent before the end of 2011, according to the document.

Environment Canada also ordered on Wednesday a study of the environmental impact of using "marginal lands" -- such as contaminated sites and buffer strips along roads and rivers -- for the production of biofuel crops or for production plants. The U.S. and European biofuel industries have come under criticism for taking up traditional farmland to grow biofuel crops, Environment Canada said.

($1=$1.03 Canadian)

(Reporting by Rod Nickel; editing by Peter Galloway)